1. Field of the Invention
The present invention relates to a wireless communication system and, more particularly, to a system for providing appropriate mobile services to subscribers.
2. Description of the Related Art
A successful mobile service provider has to be able to accomplish three tasks: 1) acquire new subscribers, 2) retain existing subscribers and 3) make a profit on the service provided. To this end, a mobile service provider typically develops several service plans and sends informational material on these service plans to retailers and subscribers. Many subscribers will purchase a service plan (from a retailer or directly from the service provider) based on a low base monthly rate and generally not based on their actual usage habits (e.g. number of domestic and international long distance calls). Satisfaction with an ill matched service plan usually lasts until the monthly phone bill comes and then the subscriber questions the suitability of the service plan. The level of dissatisfaction increases with each passing month (or bill) and the customer starts looking for a better deal. Unfortunately, this dissatisfaction is rarely expressed directly to the mobile service provider in any form other than a sudden discontinuation of the service.
One of the most pressing problems facing mobile service providers is churning. Churning refers to the situation where subscribers to mobile services discontinue service with one service provider to sign with another source provider or discontinue their service all together. The churn rate for the wireless industry averages 30% annually and has cost the providers more than 3 billion dollars per in the 1997-98 timeframe. The generally accepted industry average acquisition cost for acquiring new subscribers is $400 and it takes carriers eight to nine months to make back those expenses (the average cellular phone bill was $47.70 in 1996). It is clear, that in terms of value per dollar spent, holding on to existing customers is more efficient than replacing them. Unfortunately, the first indication that mobile service providers get relating to the loss of a valued customer is when the customer calls to cancel service.
The causes of churn include; the opportunity to pay a lower rate, the chance to get something for free (e.g. free voice mail or a rebate), and service dissatisfaction. While it is important to understand the causes of churning, from a business standpoint, understanding which particular customers are most likely to churn is even more important. For example, subscribers with high monthly usage are much more likely to churn than subscribers who use their phones sparingly. Not coincidentally, it is the high usage customer who is the most valuable to the mobile service providers.
Many mobile service providers have established customer retention programs to retain their most valuable paying (MVP) customers. These programs utilize demographic and billing information (e.g. types of calls made (domestic vs. International), usage, type of service (high end vs. low end) and length of time as a customer) to identify those MVP customers most susceptible to churning. Customer service representatives contact these at risk customers and offer them incentives in exchange for their loyalty (e.g. a contract with a longer term). These programs have met with considerable success but they place considerable overhead onto the mobile service providers.
Access to the subscribers is another problem associated with these customer retention programs. Customers are reluctant to listen to unsolicited calls from customer service representatives and quite often customer contact is lost before the representatives can get their message across. The success of these programs is dependent on the ability to keep the customer's attention long enough to get the message across.
There is, therefore, a need for a method and system which will allow mobile service providers to gain access to their at risk MVP customers and reduce their susceptibility to churning.